Dirty business

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Written by The Indian Express | Published:November 3, 2009 3:08 am

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If there is one sector that is visibly the intersection of backroom politics,crony capitalism and serious threats to India’s internal security,it is mining. The business of resource extraction has always had its own peculiar economic logic: modern,yet dependent on the land; high-tech,yet somehow,indefinably,with feudal overtones. These anomalies have traditionally been recognised by economists,who categorise mining as the only “industrial” component of the primary,or agricultural,sector. Unsurprisingly,in the particular environment of India,this translates into a meeting of old-style power equations with a very modern ability to extract,alter and transfer resources. Hence the unimaginable numbers of crores that former Jharkhand Chief Minister Madhu Koda is alleged,according to the just-filed CBI chargesheet,to have made through using his political influence when in office as chief minister supported by many UPA parties and earlier as minister for mines under the NDA state government.

Another lesson comes from elsewhere in India,from Bellary in Karnataka,where over the past few years the Reddy brothers,mining magnates,have become a force to be reckoned with in state politics. (And even beyond,perhaps.) So much so that Karnataka’s chief minister,B.S. Yeddyurappa,has begun to feel threatened,and much of the state’s political discourse has begun to pivot on the single point of whether mining money has managed to buy up too much political influence.

This is not healthy,either for India’s democracy,or for the mining sector and those sectors that it feeds. It betokens a sector unreformed,and still subject to licence-permit raj-era rules. The Mines and Minerals Development and Regulation Act or MMDR dates from 1957,the Mines Act from 1952; the MMDR Act’s rules for obtaining a licence,the Mineral Concession Rules,are from 1960; the Mineral Conservation and Development Rules,about environmental impact,from 1988. These desperately need updating. That the Centre plans to move in the coming session of Parliament to update these is good news,as long as transparency is prioritised and a level playing field for all possible investors is ensured. The mining sector has accumulated its own long-standing interest groups which will oppose action that opens up their quasi-monopolistic hold; indeed,even within the government,the steel ministry has tried to block legislation. As shrill accusations increase that security operations against Maoists actually reflect nefarious designs on mineral resources,a legislative and reform priority must be increasing transparency in that sector.

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  • Tags:
  • Jharkhand
  • Madhu Koda
  • Mining
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